Federal appellate courts have struggled recently over exactly when a corporate insider becomes a whistleblower who’s entitled to the Dodd-Frank Act’s protections against retaliation.

The U.S. Supreme Court’s now jumping into the fray to resolve tension among the lower courts. The justices agreed Monday to take up the case Digital Realty Trust v. Somers from the U.S. Court of Appeals for the Ninth Circuit.

At issue is the U.S. Securities and Exchange Commission’s interpretation of Dodd-Frank post-financial crisis reforms that define a whistleblower as someone who reports misconduct “to the commission.” The SEC has interpreted Dodd-Frank to extend protections to workers who only report alleged misconduct internally to company officials. The agency’s position has not stopped corporations from seizing on those three words—“to the commission”—to argue that the whistleblower in any specific case isn’t a whistleblower at all. 

The high court will hear arguments in an appeal of a decision by the U.S. Court of Appeals for the Ninth Circuit. A divided three-judge panel endorsed the SEC’s view that employees are eligible for anti-retaliation protections even if they only report misconduct internally to their employers.

The panel opinion, written by Judge Mary Schroeder, upheld a district court’s decision to deny Digital Realty Trust’s motion to dismiss a former executive’s allegations that he was fired shortly after reporting possible securities violations to the company’s senior management.

Schroeder said in her March opinion that the SEC’s interpretation of the Dodd-Frank Act correctly reflected Congress’ intent to “provide protection for those who make internal disclosures as well as to those who make disclosures to the SEC.”

“We agree with the district court that the regulation is consistent with Congress’s overall purpose to protect those who report violations internally as well as those who report to the government,” Schroeder wrote.

At the Supreme Court, Williams & Connolly partner Kannon Shanmugam represents Digital Realty Trust, and Daniel Geyser of Stris & Maher is counsel to Paul Somers. 

“There was a clear split on the issue, so we’re not surprised the court decided to take it up," Geyser said. "But the Ninth Circuit’s decision is consistent with the statute and advances Congress’s intent. Digital’s reading, by contrast, would upset the proper operation of both Dodd-Frank and Sarbanes-Oxley. We look forward to litigating this important issue before the court.”

Shanmugam was not immediately reached for comment Monday.

The case at the high court attracted significant attention from business advocates. The U.S. Chamber of Commerce, in an amicus brief filed by Proskauer Rose partner Steven Pearlman, said the Ninth Circuit’s resolution of the case “would greatly expand the number of employees authorized to pursue the enhanced remedies of the act.”

The Supreme Court now appears poised to resolve a question that has divided an ever-growing number of federal appeals courts. The Fifth Circuit struck down the SEC’s approach in 2013, ruling that whistleblowers need to bring their reports of misconduct to the markets regulator to qualify for anti-retaliation protections. In 2015, the Second Circuit upheld the SEC’s more expansive view.

The SEC has taken a keen interest in the cases, filing friend-of-the-court briefs to back up broad protections for whistleblowers.

In 2015, the SEC issued guidance saying that, if it limited protections only to whistleblowers to contacted the agency, it would risk discouraging “some individuals from first reporting internally in appropriate circumstances and, thus, jeopardize the investor-protection and law-enforcement benefits that can result from internal reporting.

“Under our interpretation, an individual who reports internally and suffers employment retaliation will be no less protected than an individual who comes immediately to the commission,” the SEC said.

Earlier this year, the Sixth Circuit dodged the question of whether protections against retaliation extend only to whistleblowers to report to the SEC. The court ruled unanimously against John Verble, a former Morgan Stanley Smith Barney financial adviser who claims he was fired in 2013 for cooperating with the FBI in an investigation.

Writing for a three-judge panel, Judge Karen Moore ruled that Verble’s retaliation claim was “entirely devoid of any factual material describing his work with any law-enforcement agency, including the FBI or SEC.”

“Verble’s complaint fails to meet the threshold requirement of providing enough facts to state a plausible claim for relief. We do not reach the question of how to interpret Dodd-Frank’s definition of whistleblower for purposes of the anti-retaliation provision,” Moore wrote.

A federal judge in Tennessee had previously found that Verble was not entitled to whistleblower protections because he did not bring his reports of insider-trading to the SEC.

This story was updated with additional comment about the Supreme Court's order.